Energy Savings Opportunity Scheme (ESOS) changes

21st September 2022


The Department for Business, Energy and Industrial Strategy recently consulted on proposals to strengthen and improve the Energy Savings Opportunity Scheme (ESOS), and has published its response and decisions.

IEMA attended the consultation workshop and submitted a written response (bit.ly/Strengthen_ESOS). What are the implications?

A slight shift in direction

ESOS’s core function has not changed significantly. The change is a reduced focus on pure costs and a strengthened link to net-zero and greenhouse gas emissions. A lead assessor will still work with qualifying organisations to help them understand their energy use and make energy-saving recommendations.

Turnover and balance criteria

There is no longer a need to convert between Euros and GBP, and the criteria are now set at a turnover above £44m and a balance sheet total above £38m. From Phase 4, the thresholds will align with those for Streamlined Energy and Carbon Reporting (SECR).

Sharing of reports

If the assessment is managed at parent company level for all subsidiaries, there will be a requirement for the report to be shared with subsidiaries.

Timeframes

No immediate changes are envisaged, although the qualification date for Phase 4 onwards may be brought forward.

Compliance routes

Display Energy Certificates and Green Deal Assessments will no longer be compliance routes from Phase 4, and organisations that have not yet started Phase 3 are discouraged from using them. ISO 50001 will require consideration of net zero if used as a compliance route.

New templates

From Phase 3, there will be a requirement for commonly reported data, compliance information and recommendations to be standardised within a template. Phase 4 will introduce a checklist to confirm that the report has used an existing standard such as ISO 50002 or EN 16247.

Additional data

The de minimis exemption, which allows organisations to exclude small categories of energy use from assessment, will fall from 10% of total energy consumption to 5%, with the potential for an absolute threshold to be introduced.

Phase 4 will introduce changes to how organisations with multiple sites sample.

It is likely that use of half-hourly data will be linked to reporting requirements once it becomes readily available.

Audit reports will be required to provide commentary on data collection, monitoring, the setting of controls and staff training. This will be voluntary in Phase 3 and mandatory in Phase 4.

The work, skills and ongoing training and selection process for lead assessors will also be reviewed.

Focus on net zero

ESOS has a focus on energy saving measures that would also result in cost savings. However, an emphasis on short-term cost-saving can be at odds with longer term investment decisions that put organisations on a pathway to net zero. Therefore, there will be a requirement for recommendations to align with net-zero goals as far as possible. Recommendations will be presented alongside one another so that, overall, they prioritise long-term net-zero goals over short-term cost efficiencies.

Use of intensity ratios will be introduced from Phase 3 to line up with SECR; this can include kWh per m2, unit output per miles travelled, and so on.

PAS 51215 is being reviewed to cover additional competencies for assessors to meet these new requirements.

More detailed recommendations

Future reports will contain more guidance on audit recommendations. Not all lead assessors are qualified to make investment-grade recommendations, and this is an area for review.

Setting and delivering on targets

More weight will be put on delivering against targets and action plans set in the assessment report. Participants will have to provide annual progress updates as a voluntary requirement from Phase 3, and as a mandatory requirement from Phase 4. Assessments will have to include consideration of progress against targets.

Public disclosure of data

Some of the data to be reported will be subject to public disclosure. This is likely to include targets and action plans, and high-level audit data.

Widening the scope?

The consultation sought views on including more participants in the scheme, and it was noted that the cost burden needed to be balanced against potential savings. Further government engagement on any widening of scope will take place before changes are made.

Thanks to our ESOS trainer Chris Wilson for reviewing this article prior to publication.

Image credit | Shutterstock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

The time is now

Dr Julie Riggs issues a call to arms to tackle a modern-day human tragedy

15th March 2024

Read more

The UK government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated, Carbon Tracker has warned.

13th March 2024

Read more

Multinational corporations are undermining their net-zero commitments with excessive air travel and no plans to reduce ‘the low hanging fruit’ of carbon footprints, a study by Transport & Environment has found.

13th March 2024

Read more

Large businesses across the world are avoiding climate action due to fear they will be called out for getting their work wrong, according to a new Carbon Trust report.

29th February 2024

Read more

A thought-provoking discussion on how storytelling can change the world took place in Central London last night, alongside an exclusive sneak preview of an upcoming IEMA film series.

29th February 2024

Read more

The UK’s net-zero economy grew 9% last year while delivering higher paid jobs than average and attracting billions of pounds in private investment, analysis by CBI Economics has uncovered.

28th February 2024

Read more

A consortium including IEMA and the Good Homes Alliance have drafted a letter to UK government ministers expressing disappointment with the proposed Future Homes Standard.

26th February 2024

Read more

IEMA and the Institute and Faculty of Actuaries (IFoA) have today published up-to-date guidance to help companies and individuals understand climate-related financial information.

22nd February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close